Does your case have reasonable prospects of success?
“What are my chances of winning?” – A very common question that a client would ask his or her lawyer, especially in the early stages of the case. To answer this question, the lawyer needs to read the client’s materials and be familiar with the applicable law. In short, lawyers must not provide legal services unless they reasonably believe that the case has reasonable prospects of success. This obligation is enshrined in Schedule 2 of the Legal Profession Uniform Application Act 2014 (NSW) [LPUAA]. The meaning of the phrase ‘without reasonable prospects of success’ is ‘so lacking in merit or substance as to be not fairly arguable’ (Justice Barrett in the New South Wales Supreme Court Case, Degiorgio v Dunn (No 2)  NSWSC 3). This article will delve deeper into the meaning of this phrase with the support of a case summary of Lemoto v Able Technical Pty Ltd & 2 Others  NSWCA 153 and examine the consequences faced by lawyers if they fail to discharge this obligation.
The Legal Profession Uniform Application Act 2014 (NSW)
The LPUAA applies to solicitors and barristers. It features provisions about costs in civil claims in the Local Court, District Court and Supreme Court, where there are no reasonable prospects of success. The relevant provisions are outlined below:
(1) A law practice must not provide legal services on a claim or defence of a claim for damages unless a legal practitioner associate responsible for the provision of the services concerned reasonably believes on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success.
(4) A plaintiff’s claim has reasonable prospects of success if there are reasonable prospects of damages being recovered on the claim. A defence has reasonable prospects of success if there are reasonable prospects of the defence defeating the claim or leading to a reduction in the damages recovered on the claim.
Advising on prospects of success of a case is an essential task for all litigation lawyers. Being able to do so accurately requires many years of experience. The lawyer needs to understand the facts of the client’s case, read all the available evidence, compare similar cases, and apply the current laws. Both the Plaintiff’s lawyer and the Defendant’s lawyer need to advise their respective clients on prospects of success. Our case summary of Lemoto will explain the standard expected by the Courts to discharge the obligation.
After the client is advised the prospects of success and the cost estimate of the matter, he or she can make an informed decision about going to court. Litigation is not only expensive, but it can also be stressful and drag on for over a year. If the prospect of success is low, the client may choose cost-effective options such as negotiating with the other side or withdrawing the case completely.
The decision of Lemoto examines the principles governing the application of the phrase “reasonable prospects of success”.
New South Wales Court of Appeal
Appellant: Mr Lemoto was the solicitor for the third respondent.
First Respondent: Able Technical Pty Limited, employer of the third respondent, a labour / hire agency.
Second Respondent: B & C Mailing Pty Limited.
Third Respondent: Christine Stoddart, who had suffered an injury to her lower back on 11 October 1999 from lifting boxes while working at the second respondent’s premises.
On 26 November 2001, the appellant filed a Statement of Claim in the District Court seeking damages on the third respondent’s behalf. In those proceedings, the first and second respondents were named as the first and second defendants respectively. The matter was referred to arbitration and the third respondent lost. The third respondent sought a rehearing and lost again. The District Court Judge made costs orders against the appellant pursuant to s 198M, Part 11, Division 5C of the Legal Profession Act (LPA). The purpose of Part 11, Division 5C of the LPA is to deter lawyers from representing a client whose case had no reasonable prospects of success. The appellant sought leave to appeal against the costs orders.
The Court of Appeal allowed the appeal and discharged the costs order because the District Court Judge failed to accord procedural fairness to the appellant. The District Court Judge did not inform the appellant of the precise basis upon which he had apparently formed the view that the appellant had provided legal services to the third respondent without reasonable prospects of success.
Furthermore, the Court commented that a costs order should not be made against a lawyer because a case was unsuccessful. That proposition is not weakened because one party lost twice. The third respondent had an adverse outcome for reasons largely connected to the District Court Judge’s assessment of her credibility. Therefore, the third respondent’s claim did have reasonable prospects of success.
Costs claims against lawyers and other disciplinary actions
Section 99 of the Civil Procedure Act 2005 (NSW) contains provisions for clients and opposing party to seek personal costs against lawyers in relation to an unsuccessful claim or defence. Lawyers are protected by professional indemnity insurance against claims for personal costs.
Alternatively, clients could lodge a complaint to the Office of the Legal Services Commissioner (OSLC) if their lawyer demonstrated unsatisfactory professional conduct or professional misconduct. If the lawyer is guilty, he or she could face consequences including removal from the Roll of Legal Practitioners, suspension of practicing certificate or a fine.
Lawyers in New South Wales have an obligation to not provide legal services in a civil case unless it has reasonable prospects of success. The consequences faced by lawyers for failing to discharge this obligation include costs orders and complaints to the OSLC. The case of Lemoto is one example where a costs claim against a lawyer did not succeed. Before you initiate any court proceedings, you should contact a lawyer for a consultation. Our litigation team have over 10 years of experience in representing clients across all levels of court.
Disclaimer: This publication is general information only and does not purport to provide legal advice. We do not accept responsibility for any losses for reliance upon this publication.
Ge Wu is the solicitor director of Legal Point Lawyers & Attorneys. He has been admitted to practise law since 2005. Throughout his practice, Ge Wu predominantly practises in the areas of Property Law, Immigration Law, Commercial Law, Civil Litigation and Family Law.
His experience covers all aspects of property law, commercial/retail lease, immigration law and civil litigation, while at the same time, he also has experience in family law, criminal law and other areas such as will-drafting and general advice.
He has frequently been instructed by corporate clients in pre-acquisition due diligence reports, structuring property development, land/shopping centre acquisitions, G.S.T. and stamp duty advice for buying/selling businesses, as well as share transfers and company re-structures.
Ge Wu has been appointed as Notary Public since 2011 and started to provide Notary Public service to clients from different cultural backgrounds.
Daniel’s expertise spans civil litigation, criminal law and real property matters.